PERIOD 1 JAN – 30 JUNE 2018 IN BRIEF

• Net sales for the period amounted to MSEK 0.0 (0.1 million). Sales for the second quarter were 0.0 MEK (0.1 M)

R & D expenses for the period amounted to SEK 20.8 M (25.1 M), of which the second quarter amounted to SEK 8.9 M (16.8 M)

Operating profit for the period amounted to SEK -22.9 million (-27.7 million), of which the second quarter amounted to SEK -10.2 million (SEK -18.0 million)

Profit after financial items for the period amounted to SEK -23.1 million (-27.7 million), of which the second quarter amounted to SEK -10.6 million (SEK -18.0 million)

Earnings per share for the period amounted to SEK -0.15 (-0.20), of which the second quarter amounted to -0.07 SEK (-0.13)

Cash flow from operating activities for the period amounted to SEK       -13.4 million (-25.6 million), of which the second quarter amounted to SEK -3.5 million (-16.2 million)

Shareholders' equity amounted to SEK 56.2 million (SEK 60.1 million) or SEK 0.30 (0.41) per share as per June 30, 2018

The equity ratio at June 30, 2018 was 75 percent (79 percent). Liquid funds amounted to SEK 52.7 million (SEK 54.1 million) on 30 June 2018

SIGNIFICANT EVENTS DURING THE SECOND QUARTER

• Kancera AB reported results from a Phase I study in healthy subjects with the immunoregulating drug candidate KAND567. The study showed that KAND567 is safe and well tolerated up to plasma concentrations that were five to ten times higher than the calculated effective level of therapeutic effect in humans. Upon further increase of the dose, a reversible increase in markers for liver effect was noted. The results also showed that KAND567 blocks the fractalkine system in humans.

 • Kancera reported results from three preclinical disease models showing cardiovascular protection properties of KAND567.

Kancera announced that it is now evaluating the conditions for continued clinical development of KAND567 against cancer and inflammatory heart and cardiovascular damage, e.g. in connection with infarction.

• Kancera announced that the scientific article "First-in-class oral small molecule inhibitor of the tyrosine kinase ROR1 (KAN0439834) induced significant apoptosis of chronic lymphocytic leukemia cells" was published in the journal Leukemia (Nature Publications).

Kancera reported that the company's HDAC6 inhibitors and ROR inhibitors are effectively absorbed in the brain and bone marrow, which allows the development of these substances against new clinical uses, and that the European Patent Office has given Kanceras HDAC6 inhibitors the opportunity for rapid approval process due to its level of invention.

  Kancera reported that a patent application has been filed comprising a new synthesis pathway for KAND567 which provides an improved quality of active substance and the possibility of extended protection for a future drug. Furthermore, Kancera reported that new formulations of KAND567 have been developed for oral and intravenous administration. Kancera announced that the new share issue, which was decided upon at the Extraordinary General Meeting on April 20th, 2018, was subscribed to 48 MSEK (approximately 80.7 percent). The Board of Directors of Kancera estimates that this cash contribution covers the costs of the main objectives of the emission, i.e. to prepare and conduct a clinical Phase IIa study of KAND567 within the Fractalkine project.

  Kancera's Annual General Meeting on May 30th, 2018 decided that, in addition to re-election of the Board, Anders Gabrielsen will be elected as new Board member.

SIGNIFICANT EVENTS AFTER THE END OF THE SECOND QUARTER

• Kancera AB (publ) has announced the submission of patent application for unique antagonists of the Fractal System. From these antagonists, Kancera intends to further develop a new drug candidate, which is estimated to take about 12 months. The development of this new drug candidate is not expected to affect the planned clinical phase IIa study of KAND567.

STATEMENT FROM THE CEO

During the second quarter of 2018, several key goals for the company were achieved. New patent applications strengthened the Fractalkine project, the board was supplemented with current experience from major pharmaceutical companies and the company was funded for future clinical studies.

The new issue, which gave shareholders preference, yielded approximately 48 MSEK before issue costs. The liquidity will be used primarily for the preparation and implementation of a clinical phase IIa study of KAND567, which is expected to start in the first half of 2019. Payment to guarantors and advisors took the form of units (shares as options) and cash according to a distribution reported under the heading ”The share capital and the share."

While Kancera's main resources are now being invested in the Fractalkine project, Kancera's ongoing work in the ROR1, HDAC6 and PFKFB3 projects is aimed at establishing external collaborations for the further development of these projects in blood cancer (ROR1 inhibitors), ovarian cancer (PFKFB3) and HDAC6-related disease states affecting the brain.

Strengthened by Kancera's positive preclinical research findings, which show that KAND567 significantly reduces cardiac damage after infarction, and clinical trials that show that active doses can be achieved in humans, we have sought to add skills to the board in the cardiovascular field. We are therefore pleased to welcome Anders Gabrielsen as new board member. He has long experience in drug development and situation analyses in cardiovascular disease from three major pharmaceutical companies, which further strengthens Kancera's strategy work.

In the Fractalkine project, we developed two product formulations of the clinical drug candidate KAND567 in the spring. These together provide for both oral and intravenous treatment. Intravenous treatment becomes relevant in a Phase II study where KAND567 is delivered directly into the bloodstream to protect the heart when the patient arrives at the hospital after an infarction.

In May, Kancera applied for patent protection for an improved method of manufacturing products based on KAND567. In July we filed a further patent application, this time to protect new antagonists of the fractalkine system. Kancera's knowledge of these new antagonist properties is already so great that we see good opportunities to select a new drug candidate in the next year. Such a drug candidate would enable us to develop unique products against multiple diseases (such as cardiovascular disease, inflammation and cancer), which in turn strengthens Kancera in the commercialization of the Fractalkine project.

Thomas Olin
CEO Kancera AB (publ)